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Consumer Generated Advertising in Today’s Marketing World March 29, 2011 With the increasing development of technology, advertising has changed significantly. These changes force organizations to adapt and embrace new concepts. The traditional way of advertising put all the control in the businesses hands although now this control shifted to the consumers. ‘Consumers are now creating their own ads for the brands they love and hate, using inexpensive software and powerful personal computers, and then distributing these via social networks such as YouTube’ (Peter Steyn, 2010).
Consumer generated advertising is centered on what individuals, that consume a product or service, relay about their experience. Therefore these messages can have a positive or negative effect on a particular company or product depending on the individual’s experience. A report on www. IgoUgo. com stated that there was a 10% increase in conversion for travel sites that provide consumer-generated content. This increase is due to the messages consumers posted that provided firsthand experience. Consumers are more likely to believe other consumers compared to the company selling a product or service.
Due to the power shift from the organization to the consumer, consumer generated advertising has become very important in today’s marketing world. Some businesses are uncertain and undecided about this form of advertising but whether they like it or not it seems CGA is not going to be a fad, it may become a permanent form. Therefore it has become very important for businesses to understand the concept so they can counteract the negative advertising that is put out into social media sites such as Facebook, blogs, podcasts, and other personal web pages. CGA has gained importance because it affects many aspects of a business.
One main importance involves the advertising costs businesses suffer from. Due to this form of advertising this cost can be minimized to only a fraction of what is being spent on the traditional methods such as newspaper ads, commercials, or billboards. Before cutting advertising costs marketers need to first concentrate on how to generate positive CGA. Since this type of advertising is feedback in the consumer’s perception it helps organizations evaluate the product and decide if changes need to be made. Lastly, consumer generated advertising is more effective than the traditional methods.
Effectiveness is added in two ways, it makes advertising faster due to the word-of-mouth method that is used between consumers and it creates a ‘real’ feel which in turn produces more credibility towards a product or service. The development of technology and popularity of social medias has lead to the integration of consumer generated advertising in marketing practices. These new developments and growing popularity are something marketers cannot ignore. The development of the internet and social media sites encouraged people to voice their actions, opinions and thoughts on many different topics.
Since there is a great majority of consumers creating content about a product or company marketers must address it and make it a part of their practices. Due to the fact that the consumer is the key component it is vital that the organizations allow them to engage in the production processes. By both components collaborating together it provides an advantage for not only one side but both. Since the consumers have a say, have the feeling of being heard and get to choose what they would like to see in the markets it provides them with advantages.
When the consumer feels like they are being heard they develop a relationship with that brand or a co-creation. An example of a co-creation between a consumer and an organization is the contest Firefox Flicks had that allowed consumers to submit a 30 second clip where one would be picked and aired. This gives consumers incentive to get creative and form a relationship with the product. When the consumers put their thoughts and messages out there it provides an advantage to the organization because it provides a fresh, outside perspective.
Organizations can find information on what consumer prefer by analyzing consumer generated advertising and what is liked or disliked about other products. There are many implications of consumer generated advertising on marketing practices and consumer marketer relations. Some of the positive implications are cost, more diversity, and increased ties to consumers. The downsides include having to sort through all of the advertisements to find the best ones and the ideas may be lower caliber than ones generated by paid associates. The main implication of consumer generated advertising is cost.
This is because you are spending less money on employee’s salaries, advertisements, and because companies have less space to fall if they fail. When companies engage in consumer generated advertising they are paying less for their marketing staff to generate ideas. They are also spending less on overall advertising because they just put out that they want people to come up for advertisements for a certain good or service and then they pay to air those commercials. This is better as well due to the fact that consumer generated advertisements have more impact on sales (Moskowitz, 2006).
When companies are not paying as much for the advertisements then it is not as big of a deal if the advertisements are not as effective. When companies engage in consumer generated advertising they are getting very creative ideas and they are also getting more diverse advertising because anyone who wants to be a part of the consumer generated advertising can be. All they have to do is send their ideas in, so companies get ideas from places they would not normally go for them. Also with this they may reach a demographic or group that they would not normally reach because of the diversity.
Consumer generated advertising also increases the ties between companies and consumers. When consumers are able to send in their ideas they feel like they have an impact and they also feel like they have more ownership with the brand. Companies can use consumer generated advertising to see how passionate consumers are about your brand because the more people you have participating in the advertising the stronger the brand is. If a company gets no responses for an attempt at consumer generated advertising then they know that the brand has not achieved loyalty in the consumer’s eyes.
Advertising is ever changing in relation to the way humans view and use different sources of media. As the focus of attention switches from one trend to another in society so does the way that marketers choose to advertise. The trend can be actively followed dating back to when newspaper and radio ads were both prevalent and abundant, switching to magazines and television, followed by the internet and web age(where we currently are), and into the new, fast growing era of smartphones and PDA’s. Advertising is now becoming more personal and direct to the audience it is intended.
This is accomplished by generating information about consumers through databases in which consumers usually don’t know that they are even a part of. An early example of consumer generated advertising is the Kroger PlusCard that Kroger Brand Grocery Stores actively use. The card is used by consumers to obtain lower prices, rewards, and special promotions while shopping at Kroger grocery stores. However, the card also serves as a means to collect information about every consumer that uses it. To gain savings, you are to swipe your PlusCard at the point of checkout.
Every time you do this information is stored in a database ranging from how often you shop, how much money you usually spend, and even the types of items you’re more accustomed to buying. When your receipt is printed at checkout there are coupons printed along with it that are specifically targeted towards you and your shopping habits. These coupons and advertisements are consumer generated based on the likes and habits of each individual card holder. Instead of offering the same coupon to all of its members or society, Kroger has adopted a system that makes the customer an individual which would make the ad more efficient and useful.
This would reduce cost and potentially increase the customer responsiveness. The internet is a huge way in which consumer generated advertising is utilized. Most websites will generally collect information about users upon visiting. The information can range from being general and narrow to very detailed and extensive which will form the type of advertisement each member will receive. One of the first websites I noticed that used this type of marketing strategy was Facebook. Facebook is a social networking platform that allows you to connect and socialize with your peers.
Each user creates a profile listing information such as likes and dislikes, hobbies and interests, schools attended and other various items. From the content that each user submits, Facebook makes an effort to advertise within the confines of that personal information. This strategy makes it direct to each individual user with hopes of each ad becoming more effective. For example, Facebook knows that I am a college student, in a fraternity, and the area in which I live so this way they have specific advertisements directed specifically towards me (see example).
With television, marketers have no guarantee that their target market will even view the correct ad, making consumer generated ads on the internet through social platforms more effective in reaching its intended audience. The quality of these internet ads are usually very high due to the amount of information that users either knowingly or unknowingly reveal. The current trend in society today is the use and development of smartphones. With a smartphone consumers are able to constantly stay connected anywhere at any time.
With the capability of having the internet in the palm of your hand physical computers are being used a lot less. Smartphones are capable of doing almost everything that the internet once done as well. Knowing this, marketers have developed new ways in to reach these users. With all smartphones, users are able to download different applications that correlate to their different interests and daily needs. This gives each user the opportunity to have exactly what content they wish to have on their phone and make it more personal.
This is also an opportunity by marketers to advertise to individuals rather than large unfiltered groups. For example, if a user were to download a game from a particular programmer then that programmer may have a link within the current game to spawn a webpage once clicked on which will lead to other applications produced by the programmer. On the webpage you might also find advertisements for other companies related to the game you have downloaded. This is a more effective way for marketers to distribute information about their product. The previous picture was captured from www. facebook. com.
Major corporations are getting into the game of CGA more often to promote brand image and cut advertising costs. Companies like Home Depot and Chevrolet for example have been innovating with new ways of generating the buzz as technology increases and traditional marketing methods’ effectiveness declining each year. Coca-cola and Heinz hold contests with prizes for these consumer generated ideas in hopes that a loyal fan, or an aspiring marketer will take up the challenge in hopes a career can spring from it (internetnews. com). From Facebook to Movie theatres, they are popping up everywhere.
Advertising in the traditional sense is on its’ way out. New technology will see its’ demise in the coming years. CGA is the way it will be done years from now. It is both less costly and more effective. In 1954, the three major networks had 100% of the audience, in 1980 it dropped to 87%, 1990 to 62% (Oliver, 1994), and today with a fourth major network added it dwindles to 36% (Noam, 2009). The higher cost of advertising on a station coupled with the need to advertise on more networks has helped to drive costs through the roof. Companies have many routes to get consumer involvement.
One is to do voting on certain products or commercials over others to determine which ad campaign the company should go with. Home Depot did a vote on 3 riding lawnmower commercials with slight variations. The consumer voted on their favorite and the winner became the new Home Depot commercial. There was a standings section on the page to see how your favorite stacked up. Even though the commercials were not directly consumer created, the voters acted as a sample market of sorts. The company cheaply found their most effective advertisement. Pepsi co.
Doritos followed the voting trend with “Crash the Super bowl Promotion” with the alteration that each of the ads were completely consumer created (York, 2009). Pepsi co offered the winner a $1 million prize if the ad topped the USA Today poll. Without the cash prize they topped fourth in 2007 and 2008. In 2011, the “Dog’s revenge for Doritos teasing” ad tied with Bud light for top honors earning the creators of the ad for the contest the cool $1 million prize and a job at Pepsi to work in their marketing department creating future ads for the company (How the Super Bowl Ads Ranked with Viewers, 2011).
Doritos also took the fourth spot during this years’ Super bowl with its campaign defeating many professionals in the industry. Coca cola has also cashed in on this method. They do not feature the creations at the Super bowl, but in over 2,000 movie theatres as preshow entertainment through a short film contest called “Refreshing Filmmakers awards”. This contest specifically targets college and university students and provides finalists for the storyboard and script entries $7,500 to shoot their proposed short films and the winners get a $10,000 prize.
Interactivity is another method advertisers are using which is quickly becoming the norm. The application “Pandora internet radio” has occasional ads with choices to choose from. Absolut Vodka has an add where you can choose between 3 choices, “chill”, “rocks”, “straight” with resulting outcomes. Another is for Cincinnati Cupcakes, a regional operation that pops an ad up on your Pandora player asking you if you “like” or “dislike” cupcakes. If the target clicks “like” it tells you a bit more about promotions, company info. Etc. and a “dislike” closes the ad. Yahoo also has ads in its’ online radio service that allows you to choose between 3 ads to view. The data captured from such choices influences future commercials and promotional strategies. Sites like Nabisoworld. com provide games for customer to play with product name exposure everywhere. Tomorrow’s advertising will be as customized and varied as the products customers ask for. With hard data directly from consumers it will both streamline and identify consumer tastes easier.
Marketing departments will not have to do as much of a guessing game and marketing will be treated like a new product development team creating the new diet drink the public is calling for. Sites such as Facebook and Youtube are quickly becoming the tools of choice for the new form of advertising because of their price and large user-base. Works Cited Goodson, S. (2010, 11 19). Are You Listening To The Future Of Advertising? Retrieved 03 26, 2011, from Forbes: http://blogs. forbes. com/marketshare/2010/11/19/are-you-listening-to-the-future-of-advertising/ How the Super Bowl Ads Ranked with Viewers. 2011, 02 07). Retrieved 03 25, 2011, from USA Today: http://www. usatoday. com/money/advertising/admeter/2011-02-07-2011-ad-meter-chart_N. htm Moskowitz, R. (2006, 05 10). Are Consumer Generated Ads Here To Stay? Retrieved 03 26, 2011, from iMediaConnection: http://www. imediaconnection. com/content/9521. asp Noam, E. M. (2009). Mass Media. Oxford: Oxford UP. Oliver, R. T. (1994, 12). The Death of Advertising. Retrieved 03 29, 2011, from Jstor. org: http://www. jstor. org/stable/4188952? seq=2 Peter Steyn, A. W. (2010). Consumer-generated content and source effects in financial services